Q1/ 2013 - Telenor · preparing for the launch of 3G services on the 2.1 GHz frequency band in the ... quarter of 2013 compared to the first quarter of 2012, unless otherwise

Q1/ 2013 Interim report January–March 2013

ContentsHighlights /01/

Interim report /02/Telenor’s operations /02/Group overview /08/Outlook for 2013 /10/

Condensed interim financial information /11/Notes to the consolidated interim financial statements /16/

Definitions /20/

TeleNOr fIrsT quarTer 2013

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Jon fredrik Baksaaspresident & CeO

Improved margins with stable revenues

Highlights first quarter 2013• Stableorganicrevenues1)

• EBITDAmarginof34%• OperatingcashflowofNOK5.6billion2)

• EarningspershareofNOK2.34

“Thefirstquarterof2013ischaracterisedbyasolidoperatingcashflowofNOK5.6billion,strongmarginsinseveraloperationsandgoodprogressinoperationalperformanceinIndia.ThestrengthenedEBITDAmarginof34%is further supported by a higher share of bundled subscriptions and good networkqualityintheNorwegianoperation.

The organic revenue growth for the Group this quarter is weaker than previous quarters due to lower growth contribution from India and handset salesaswellasregulatoryfactors.However,weregardtheunderlyingtrendsaspositive.WeseehealthymobileservicerevenuegrowthinouroperationsinNorwayandThailandcontributingtosolidmargins,aswellasstrongcustomeracquisitioninBangladesh.RegulatoryissuesimpactedourperformanceinPakistanthisquarter,howeverwenowseesalespickingup.Duringthisquarter,dtaccompletedanationwidenetworkupgradeandispreparingforthelaunchof3Gservicesonthe2.1GHzfrequencybandinthesecondquarter.Thiswillrepresentanimportantmilestoneinthetransitionfromaconcessiontoalicencingregime.

InNorway,wecontinuetoinvesttosecureourcustomers’accesstosuperiormobilenetworkcoverageandhighqualityofservices.Wehaverecentlyadjusted our mobile market offers to adapt to changing customer needs and

thetransitiontodata.Weseepositiveeffectsfromoperationalefficiencythisquarter,andregardthisasakeycontributortovaluecreationgoingforward.

To enable our customers to take advantage of the opportunities that theInternetoffers,weneedtoberesponsivetochange.Thegrowthindemand for data centric services requires significant investments in high-speednetworks.Itisthereforeparamountthatwecontinuetoimplementsustainable business models to secure long-term return on these investments.

Based on the performance in the first quarter and our estimates for the rest oftheyear,weadjustthe2013outlookfororganicrevenuegrowthsomewhatto2-4%.Atthesametime,wemaintaintheoutlookforEBITDAmarginandcapex/sales.”

Key figures Telenor Group

First quarter Year

(NOK in millions except earnings per share) 20132012

Restated2012

Restated

Revenues 24 716 25 119 101 718

EBITDA before other income and expenses 8 423 7 761 32 848

EBITDA before other income and expenses/Revenues (%) 34.1 30.9 32.3

Adjusted operating profit 3) 4 985 4 025 18 446

Adjusted operating profit/Revenues (%) 20.2 16.0 18.1

Profit after taxes and non-controlling interests 3 602 584 8 809

Earnings per share from total operations, basic, in NOK 2.34 0.37 5.63

Capex 2 868 2 682 21 511

Capex excl. licences and spectrum 2 868 2 487 12 299

Capex excl. licences and spectrum/Revenues (%) 11.6 9.9 12.1

Operating cash flow 2) 5 555 5 274 20 549

Net interest-bearing liabilities 4) 28 853 18 384 33 082

Pleaserefertopage10forthefulloutlookfor2013,andpage20fordefinitions.

1) Organicrevenueisdefinedasrevenueadjustedfortheeffectsofacquisitionanddisposalofoperationsandcurrencyeffects.2) OperatingcashflowisdefinedasEBITDAbeforeotherincomeandexpenses–Capex,excludinglicencesandspectrum.3) AdjustedoperatingprofitisdefinedasOperatingprofitlessotherincomeandexpensesandimpairmentlosses.4) Netinterest-bearingliabilitiesaredefinedasinterest-bearingdebtexcludingnetpresentvalueoflicenceliabilities.


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Norway

First quarter Year

(NOK in millions) 20132012

Restated2012

Restated

Revenues mobile operation

Subscription and traffic 2 510 2 418 10 247

Interconnect revenues 188 271 992

Other mobile revenues 314 331 1 353

Non-mobile revenues 232 238 1 048

Total revenues mobile operation 3 244 3 258 13 639

Revenues fixed operation

Telephony 732 802 3 096

Internet and TV 1 232 1 177 4 858

Data services 121 126 501

Other fixed revenues 343 351 1 384

Total retail revenues 2 428 2 456 9 838

Wholesale revenues 492 507 2 027

Total revenues fixed operation 2 920 2 964 11 865

Total revenues 6 164 6 222 25 504

EBITDA before other items 2 719 2 455 10 854

Operating profit 1 919 1 735 7 845

EBITDA before other items/Total revenues (%) 44.1 39.5 42.6

Capex 988 975 4 144

Investments in businesses 20 - 173

Mobile ARPU - monthly (NOK) 284 285 296

Fixed Telephony ARPU 270 266 267

Fixed Internet ARPU 320 306 319

TV ARPU 247 241 249

No. of subscriptions - Change in quarter/Total (in thousands):

Mobile (5) 6 3 175

Fixed telephony (31) (24) 917

Fixed Internet (3) 1 870

TV 3 4 524

• Thenumberofmobilesubscriptionsdecreasedby5,000duringthisquarter.Increasednumberofcontractsubscriptionswasmorethanoffsetby reduction in prepaid subscription and migration from pure mobile broadbandcontractstobundledpriceplans.Attheendofthequarter,themobilesubscriptionbasewas1%highercomparedtothefirstquarterlastyear.

• ReportedmobileARPUwasstable.Increaseddatarevenuesfrommigration to bundled price plans were offset by reduced interconnect rates.TheinterconnectratecutsfromJuly2012andJanuary2013affectsARPUnegativelywithNOK9.

• Reportedmobilerevenueswerestable.Adjustedforaone-timeitem(correction of prepaid scratch cards) and the effects of easter and leap day,mobilesubscriptionandtrafficrevenuesincreasedby6%.

• Fixedrevenuesdecreasedby1%.Theeffectsfromreducednumberoftelephony subscriptions and reduction in wholesale revenues were partly offsetbyincreasedrevenuesfromInternetandTV.DuringthequarterTelenoradded4,000fibrecustomersbringingthetotalcustomerbaseonfibreto60,000.

• TheEBITDAmarginincreasedby5percentagepointsmainlyduetoloweroperation and maintenance costs as storms caused high fault correction costinthefirstquarterlastyear.Inaddition,ahighershareofsalesthroughcustomerserviceandthewebportalreducedcommissioncosts.

• TelenorNorwaycontinuestoinvestheavilytoincreasecoverageandcapacityon3Gand4Gnetworksandexpanditsfibretothehomefootprint.DuringthequarterTelenorexpanded4Gnetworkcoverageincludingroll-outonthe1800MHzfrequencybandinseveralcities.

Interim report Telenor’s operations

The statements below are related to Telenor’s development in the first quarterof2013comparedtothefirstquarterof2012,unlessotherwisestated.AllcommentsonEBITDAaremadeondevelopmentinEBITDAbeforeotherincomeandexpenses(otheritems).Pleaserefertopage8for‘Specificationofotherincomeandexpenses’.Additionalinformationisavailable at:www.telenor.com/ir


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Sweden

First quarter Year


Restated2012

Restated




Other mobile revenues 67 82 311



Revenues fixed operation 635 621 2 508

Total revenues 2 539 2 545 10 607

EBITDA before other items 705 629 2 698

Operating profit (loss) 381 343 1 403


Capex 283 243 1 173

Investments in businesses 4 - 326



Mobile (1) 33 2 385


Fixed Internet (3) (4) 545

TV 6 5 284

Exchange rate 0.8741 0.8570 0.8593

• Thenumberofmobilesubscriptionsremainedstablethroughoutthequarter.Attheendofthequarter,thesubscriptionbasewas6%higherthanattheendofthefirstquarterlastyear.

• MobileARPUinlocalcurrencydecreasedby10%drivenmainlybyalargerproportionofdiscountedoffers.Excludingtheeffectfromtariffdiscountintroducedinthefourthquarter2011,ARPUdecreasedby4%.The remaining part of the arpu decline was mainly explained by reduced interconnectratesandroamingcharges.

• Mobilerevenuesinlocalcurrencydecreasedby3%mainlyduetolowerARPUandreducedvisitorroaming,partlyoffsetbyincreasedcustomerbase.

• Fixedrevenuesinlocalcurrencywerestable.Theeffectfromincreasednumber of internet and TV subscriptions was offset by reduced arpu togetherwithfewertelephonysubscriptions.Excludingtheeffectfromacquisitionsin2012,fixedrevenuesdecreasedby8%,ofwhichslightlymorethanhalfwasduetofewertelephonyrevenues.

• Totalrevenuesinlocalcurrencydecreasedby2%.Excludingthepositiveeffectfromacquisitions,totalrevenuesdecreasedby4%.

• TheEBITDAmargininlocalcurrencyincreasedby3percentagepointsduetoimprovedhandsetnetandreducedpersonnelcosts.

• Capitalexpendituresincreasedmainlyduetothe4GrolloutthroughtheinfrastructurejointventurewithTele2,aswellasupgradeofstores.

Denmark

First quarter Year

(NOK in millions) 2013 2012 2012


Subscription and traffic 694 745 2 943





Revenues fixed operation 184 231 850

Total revenues 1 192 1 501 5 729


Operating profit 8 57 (3 594)


Capex 115 136 575

Investments in businesses - - 5



Mobile (88) (21) 2 015


Fixed Internet (4) (14) 184

Exchange rate 0.9958 1.0204 1.0041

• Thenumberofmobilesubscriptionsdecreasedby88,000duringthefirstquarter,ofwhich37,000duetoaclean-upofinactivecontractsubscriptions.Theprepaidsubscriptionbasedecreasedby43,000asaconsequence of low campaign activity and aggressive price offers from competitors.Comparedtothesamequarterlastyear,thesubscriptionbasedeclinedby3%.

• MobileARPUinlocalcurrencydecreasedby15%mainlyasaconsequenceofa65%reductioninthemobileinterconnectratefrom1January2013.

• Mobilerevenuesdecreasedby19%asaconsequenceoflowersubscriberbaseandlowerARPUtogetherwithreducedhandsetsales.

• Totalrevenuesdeclinedby19%ofwhichlowerfixedrevenuesconstitute3percentagepointsofthereduction.

• EBITDAdecreasedbyDKK35millionasaresultoflowergrossprofitscausedbylowerrevenuesasexplainedabove,partlyoffsetbyamoreefficientoperation.

• CapitalexpenditurewaslowerprimarilyduetosavingsrelatedtotheinfrastructurejointventurewithTelia.Themajorityofcapitalexpenditurewasrelatedtothe4Gmigrationinthejointventure.


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Hungary

First quarter Year


Revenues




Non-mobile revenues 57 46 259

Total revenues 930 964 4 090


Operating profit 255 238 926


Capex 62 262 497

No. of subscriptions - Change in quarter/ Total (in thousands): (69) (60) 3 322

ARPU - monthly (NOK) 87 90 95

Exchange rate 0.0251 0.0256 0.0259

• Thenumberofsubscriptionsdecreasedby69,000duringthequarter,mainlyduetoprepaidchurnfromtheChristmascampaigns.Attheendofthequarter,thesubscriptionbasewas2%lowerthanattheendoffirstquarter2012.

• ARPUinlocalcurrencydecreasedby1%astheeffectofreducedinterconnect rate from 1 January 2013 was only partly offset by price increases.

• Revenuesinlocalcurrencydecreasedby2%mainlyduetoreducedARPUandalowersubscriptionbase,partlyoffsetbyhigherhandsetrevenues.

• TheEBITDAmarginincreasedby2percentagepointsmainlyduetolower sales and marketing expenses and reduced interconnect costs compensatingforincreasedhandsetcostsandtelecommunicationtax.

• ThenewconsumptionbasedtelecommunicationtaxintroducedinJuly2012 is higher than the crisis telecommunication tax which was in effect firstquarterlastyear.Inthisquarter,NOK70millionwasrecognisedforthetelecommunicationtaxintroducedinJuly2012.

• ThedecreaseincapitalexpenditurewasmainlyduetoNOK186millionpaidforthe1.8MHzawardedintheGSMfrequencyauctioninJanuary2012.

Serbia

First quarter Year


Revenues





Total revenues 669 656 2 735




Capex 46 46 221

No. of subscriptions - Change in quarter/ Total (in thousands): 7 (27) 3 207


Exchange rate 0.0665 0.0702 0.0661

• Thetotalnumberofsubscribersincreasedby7,000duringthequarterdrivenbystronguptakeof21,000contractsubscriptionsfromsuccessfulChristmasandyouthcampaigns,partlyoffsetbyareductionof14,000prepaidsubscriptions.Thesubscriptionbasewas3%higherthanattheendofthefirstquarterlastyear.

• ARPUinlocalcurrencyincreasedby5%,mainlydrivenbythecontinuedmigrationfromprepaidtocontractsubscriptions.

• Revenuesinlocalcurrencyincreasedby8%fromARPUgrowthandalargersubscriptionbase.

• TheEBITDAmarginincreasedby1percentagepointcomparedtolastyear due to higher revenues and improved margin on outbound roaming andinterconnectpartlyoffsetbyhigherhandsetcosts.

• Capitalexpenditurewasslightlyhighercomparedtolastyearreflectinginvestments in network coverage and capacity in addition to IT modernisation.

Montenegro

First quarter Year


Revenues 106 120 584

EBITDA before other items 38 43 245



Capex 4 18 46

No. of subscriptions - Change in quarter/ Total (in thousands): (28) (60) 400

Exchange rate 7.4277 7.5868 7.4744

• Thenumberofsubscriptionsdecreasedby28,000inthequartermainlyduetochurninofprepaidsubscribers.Attheendofthequarter,thesubscriptionbasewas7%lowerthanattheendoffirstquarterlastyearmainlyexplainedbyreducedSIMpenetrationintheMontenegrinmarket.

• From1January2013,theinterconnectrateswerereducedby43%.• ARPUinlocalcurrencydecreasedby4%asreduceddomestic

interconnect rates and the challenging macroeconomic environment wereonlypartlyoffsetbychurnoflow-ARPUcustomers.

• Revenuesinlocalcurrencydecreasedby10%asaresultofthelowersubscriptionbaseandreduceddomesticinterconnectrates.

• TheEBITDAmarginwasstableastherevenuedeclinewasoffsetbyreducedinterconnectioncosts,lowerhandsetsubsidiesanddecreasedoperationalexpenditure.

dtac - Thailand

First quarter Year


Revenues


Interconnect revenues 798 767 3 036



Total revenues 4 519 4 209 16 776


Operating profit 855 855 3 226


Capex 223 139 4 144

No. of subscriptions - Change in quarter/ Total (in thousands) *): 291 115 26 318


Exchange rate 0.1887 0.1867 0.1872

*) please note that the number of subscriptions and accordingly arpu have been restatedfor2012.


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• Thenumberofsubscriptionsincreasedby291,000duringthequarter.Attheendofthequarter,thesubscriptionbasewas10%higherthanattheendoffirstquarterlastyear.

• SubscriptiongrowthandhandsetsaleswereaffectedbyunstableperformanceoftheordermanagementsystemlaunchedinJanuary2013.The system was decommissioned in March 2013 and accordingly written offwithNOK94million.

• ARPUinlocalcurrencydecreasedby2%asthedeclineinvoicerevenueswaspartlyoffsetbygrowthindatarevenues.

• Totalrevenuesinlocalcurrencyincreasedby6%drivenbyalargersubscriptionbasepartlyoffsetbylowerhandsetsales.Servicerevenuegrowthwas8%inthequarter.

• TheEBITDAmarginincreasedby2percentagepoints,primarilyduetoincreased gross margin resulting from higher service revenues partly offsetbylowermarginfromhandsetsales.

• Capitalexpenditurewasmainlyrelatedtoexpansionofnetworkcapacityand3Gcoverageonthe850MHzfrequencyband.ThenationwidenetworkmodernisationprogrammewascompletedinFebruary.

• dtacisplanninglaunchof3Gservicesonthe2.1GHzfrequencybandinthesecondquarterthisyear.Thiswillmarkanimportantmilestoneinthetransitionfromaconcessiontoalicencingregime.

DiGi - Malaysia

First quarter Year


Revenues





Total revenues 3 005 2 968 11 986




Capex 349 222 1 319

No. of subscriptions - Change in quarter/ Total (in thousands): (121) 16 10 494


Exchange rate 1.8246 1.8911 1.8843

• Thenumberofsubscriptionsdecreasedby121,000duringthequartermainlyduetodeclineintheprepaidsegment.Attheendofthequarter,thesubscriptionbasewas4%higherthanattheendoffirstquarterlastyear.

• ARPUinlocalcurrencydecreasedby4%asaresultofcontinuouspricepressureonbothdomesticandinternationalvoicetraffic,partlyoffsetbyincreaseddatausage.

• Totalrevenuesinlocalcurrencyincreasedby5%mainlyduetohigherhandsetsales.

• TheEBITDAmargindecreasedby4percentagepointsasaresultof increased sales of device bundles and intensified competition on internationalvoicetrafficpartlyoffsetbyimprovedopexefficiency.

• OperatingprofitcontinuedtobeimpactedbyaccelerateddepreciationsofNOK160millionrelatedtotheon-goingmodernisationofnetworksandITsystems.Accelerateddepreciationsinthefirstquarterof2012amountedtoNOK265million.

• Capitalexpenditurewasmainlyrelatedtothenetworkmodernisation,3Gupgrades,deploymentoffibreandIS/IT-relatedinvestments.Thenetwork modernisation is expected to be completed in the second half of 2013.

Grameenphone - Bangladesh

First quarter Year


Revenues









Capex 86 260 3 021

No. of subscriptions - Change in quarter/ Total (in thousands): 1 771 1 141 40 021


Exchange rate 0.0711 0.0700 0.0711

• Thenumberofsubscriptionsincreasedby1.8millionduringthequarter,followinganincreaseingrossadditionsandreducedchurn.Attheendofthequarter,thesubscriptionbasewas11%higherthanattheendoffirstquarterlastyear.

• ARPUinlocalcurrencydecreasedby10%duetoregulatorydirectiveson10secondpulsebillingandremovalofcallset-upcharges,inadditiontothe continuous dilution effect from growth in lower revenue generating segments.

• Revenuesinlocalcurrencyincreasedby1%primarilycomingfromincrease in site sharing and one-time effect from recognition of earlier deferredSIM-replacementrevenues,whichwasalmostoffsetbydeclineinARPU.Asaresultofseveralcampaignsduringthequarter,dailyservicerevenuesincreasedby6%fromlastquarter.

• TheEBITDAmargindecreasedby8percentagepointsprimarilyasaresult of increased market spending including commissions related to thestrongsubscriptiongrowth.Inaddition,electricityandfuelpricehikescontributedtoincreaseinoperationalexpenditures.

• Stringentprioritisationtoprimarilysupportcurrenttrafficdemandreducedcapitalexpenditureduringthequarter.

• Thelicenceguidelinesfor3GinBangladeshwerepublishedbytheregulatoron14February2013andtheauctiondatehasbeensetfor24June2013.


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Pakistan

First quarter Year


Revenues

Subscription and traffic 946 1 058 4 176






Operating profit (loss) 1 (25) (243)


Capex 427 93 749

No. of subscriptions - Change in quarter/ Total (in thousands): 277 1 218 30 564


Exchange rate 0.0574 0.0639 0.0624

• Thenumberofsubscriptionsincreasedby277,000duringthequarter.TheregulatoryrestrictionsonSIMsalethroughretailchannels,introducedinDecember2012,continuetohampersubscribergrowth.However,effortstostrengthenalternativesaleschannelfootprinthasimprovedthesituationduringthequarter.Attheendofthefirstquarter,thesubscriptionbasewas5%higherthanattheendoffirstquarterlastyear.

• ARPUinlocalcurrencydecreasedby12%,bothasaresultofgovernmentenforced network outages and the effect from establishment of International Clearing House (ICH) resulting in a large reduction of incominginternationaltraffic.

• Totalrevenuesinlocalcurrencyincreased3%,mainlydrivenbygrowthinfinancialservicesandsitesharing.Thepriceincreaseofinternationalincoming traffic after implementation of ICH has been almost fully offset byreducedvolumesandanoticeableincreaseingreytraffic.

• TheEBITDAmarginwasreducedby2percentagepointsfollowinga reduction in gross margin due to forced industry contribution to implementation of grey traffic monitoring equipment and increased vendortransitioncostsforoperationandmaintenance.

• OperatingprofitwasnegativelyaffectedbyaccelerateddepreciationsofNOK235millionrelatedtotheon-goingnetworkmodernisation.

• Capitalexpenditureincreasedduringthequarterasaresultofgoodprogressonthenetworkmodernisationand1,325siteswereswappedduringthequarter.Itisexpectedtobecompletedtowardstheendof2013.

India

First quarter Year


Revenues 708 1 009 3 716

EBITDA before other items (185) (622) (1 981)

Operating profit (loss) (194) (4 684) (6 283)

Capex 36 142 4 526

No. of subscriptions - Change in quarter/ Total (in thousands) *): (3 255) 3 170 26 840


Exchange rate 0.1038 0.1152 0.1091

*) please note that the definition for active subscriptions in the Indian operation is more conservativethantheGroupdefinitiononpage20,duetohighchurnintheIndianmarket.Subscriptionsarecountedasactiveiftherehasbeenactivityduringthelast30days.

• During2012andfirstquarter2013,TelenorIndiahascloseddownoperationinsevenofthirteentelecomcircles.Thisinfluencescomparabilityofnumberofsubscriptionandrevenue.ClosureofthethreecirclesMumbai,WestBengalandKolkataaffectsthetotalsubscriptionbaseby4.6millioninfirstquarter.Thefollowingcommentsonthedevelopmentofthesixcontinuingcircles.

• TelenorIndiareached23.6millionsubscribersbytheendofthequarter.Theoperationalcirclesadded1.4millionsubscriptionsduringthequarter,making a positive shift from the negative development experienced in the fourthquarterof2012.

• Thesubscriptiondevelopmentcontinuestobeaffectedbyimplementationofstrictercustomeridentificationrequirements.Thisisresultinginlowergrossadditions,reducedchurnandimprovedqualityinthesubscriptionbase.Themonthlychurnratewas5%,downfrom12%inthefourthquarterof2012.

• TheunderlyingARPUinlocalcurrencywasINR94upfromINR90lastquarter.Theimprovementwasdrivenbyincreasedloyaltyandagrowthinusage.

• Organicrevenuesinthesixactivecirclesincreasedby7%comparedtofirstquarterlastyear.Comparedtofourthquarter2012,organicrevenuesincreasedby3%.

• TheEBITDAlossimprovedtoNOK185millionasaresultofclosedcircles,increasednetworkefficiencyandreducedsalesandacquisitioncost.


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Broadcast

First quarter Year


Restated2012

Restated

Revenues

Canal Digital DTH 1 120 1 101 4 428

Satellite Broadcasting 237 250 980

Norkring 245 237 946

Conax 130 139 569

Other/Eliminations (122) (99) (402)


EBITDA before other items

Canal Digital DTH 165 162 635


Norkring 122 121 494

Conax 42 60 230


Total EBITDA before other items 472 501 1 979

Operating profit

Canal Digital DTH 152 145 570


Norkring 55 57 254

Conax 32 39 180


Total operating profit 324 335 1 365

EBITDA before other items/ Total revenues (%) 29.3 30.8 30.3

Capex 129 62 417


DTH TV (8) (11) 945

• Totalrevenuesdecreasedby1%,mainlycausedbyConax,SatelliteBroadcasting and sub-licencing of sports events in the first quarter last year.TotalEBITDAdecreasedby6%andtheEBITDAmargindeclinedby1percentagepoint.

• RevenuesinCanalDigitalDTHincreasedby2%ashigheraveragerevenue per customer and increased sale of hardware was only partly offsetbyeffectsofalowersubscriberbase.

• TheEBITDAmargininCanalDigitalDTHwasonlevelwithlastyearat15%.

• Revenuesdecreasedby5%inSatelliteBroadcastingduetolowerrevenuesafterthephaseoutoftheThor2satelliteinJanuary2013.Thereduction in eBITDa was mainly caused by a positive reversal of bad debt provisionlastyear.

• RevenuesinNorkringincreasedby3%duetodigitalaudiobroadcasting(DAB)rolloutandinstallationrevenues,partlyoffsetbydecreaseinrevenues in Belgium due to compensation related to termination of an AMtransmissioncontractlastyear.EBITDAremainedstable.

• RevenuesandEBITDAinConaxdecreasedduetomoresmartcardsalesinlowpricemarketscomparedtothefirstquarterlastyear.

• Capitalexpenditureincreasedprimarilyduetodigitalaudiobroadcasting(DAB)networkinvestmentsinNorway.

Other units

First quarter Year


Restated2012

Restated

Revenues

International wholesale 444 450 1 921

Digital Services 183 168 707

Corporate functions 528 548 2 232

Eliminations (13) (11) (45)


EBITDA before other items

International wholesale 16 22 91

Digital Services (75) (54) (176)

Corporate functions (159) (201) (600)

Eliminations - - 1

Total EBITDA before other items (217) (234) (685)

Operating profit (loss)

International wholesale 12 17 63

Digital Services (97) (74) (239)

Corporate functions (283) (301) (1 033)

Eliminations - - 1

Total operating profit (loss) (368) (359) (1 209)

Capex 119 85 656

Investments in businesses 24 2 178 6 997

• RevenuesinInternationalwholesaledecreasedduetolowerprices.• EBITDAinDigitalServicesdecreasedmainlyduetodevelopmentofnew

services,offsetbyimprovedresultsinConnexion.• EBITDAinCorporatefunctionsimprovedmainlyasaresultoflowercost

fromlegalsupportrelatedtoVimpelCom.


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Group overview

ThestatementsbelowarerelatedtoTelenor’sdevelopmentin2013comparedto2012unlessotherwisestated.Pleaserefertonote3forfurtherinformation.

Revenues• RevenuesdecreasedbyNOK0.4billionor1.6%asaresultofappreciationoftheNorwegiankroneversusmostcurrencies.AweakerDanishmarketand

reducedscaleoftheIndianoperationwerepartlyoffsetbyhigherrevenuesfromdtac.

EBITDA before other items• EBITDAincreasedbyNOK0.7billionor8.5%mainlyasaresultofimprovedperformanceinIndia,Norwayanddtac.InGrameenphone,EBITDAwasreduced

mainlyduetohigherenergy,salesandmarketingcosts.

Specification of other income and expenses

First quarter Year


Restated2012

Restated


EBITDA margin before other income and expenses (%) 34.1 30.9 32.3

Gains (losses) on disposal of fixed assets and operations (88) (31) (161)

Workforce reductions and loss contracts (180) (90) (692)

One-time effects to pension costs (1) - (16)

EBITDA 8 153 7 640 31 980

EBITDA margin (%) 33.0 30.4 31.4

• Inthefirstquarterof2013,‘Otherincomeandexpenses’mainlyconsistedofthefollowingitems:- Gains(losses)ondisposaloffixedassetsweremainlyrelatedtoscrappingofintangibleassetsindtac(NOK94million).- WorkforcereductionsandonerouscontractsmainlyinTelenorDenmark(NOK66million)andTelenorNorway(NOK52million).

Operating profit• OperatingprofitincreasedbyNOK4.7billioncomparedtolastyearprimarilyduetoimpairmentofassetsinUninorofNOK3.9billioninthefirstquarterof

2012.• AdjustedfortheimpairmentrelatedtoUninorinthefirstquarterof2012,operatingprofitincreasedbyNOK0.8billioncomparedtolastyearprimarilydueto

improvedEBITDAasexplainedaboveandlowerdepreciationsinmostbusinessunits.

Associated companies

First quarter Year


Restated2012

Restated

Telenors share of

Profit after taxes 1 147 618 3 050

Amortisation of Telenor's net excess values (83) (22) (244)

Impairment losses of Telenor's net excess values (3) - (22)

Gains (losses) on disposal of ownership interests 4 - -

Profit (loss) from associated companies 1 065 596 2 784

• Netresultfromassociatedcompaniesinthefirstquarterof2013includesNOK1,160millionforTelenor’sshareofVimpelCom’sreportedresultsforthefourthquarterof2012,adjustedforTelenor’sshareofsignificanttransactionsandeventswhichwasrecognisedintheyearof2012.

• ThenetresultfromVimpelComwasincreasedbyNOK958millioncomparedtothefirstquarterof2012mainlyasaresultofbetteroperationalperformancecoupledwithdecliningamortisationrelatedtoWindTelecomacquisition’sexcessvaluesaswellaslowerforeigncurrencyexchangelosses.Telenor’sshareofVimpelCom’snetresultforthefourthquarterof2012was35.7%comparedto31.7%forthefourthquarterof2011.

• On16April2013,VimpelComconvertedits128.5millionconvertiblepreferredsharesownedbyAltimointocommonshares.ThisdoesnothaveaneffectonTelenor’svotinginterest,whichiscurrently42.95%,whereasTelenor’seconomicinterestisdilutedfrom35.66%to33.05%witheffectfrom16April2013,basedoncurrentoutstandingsharesandownershippercentages.


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Financial items

First quarter Year


Restated2012

Restated

Financial income 146 146 605

Financial expenses (567) (670) (2 898)

Net currency gains (losses) 168 45 (156)

Net change in fair value of financial instruments 46 789 687

Net gains (losses and impairment) of financial assets and liabilities - - (7)

Net financial income (expenses) (207) 309 (1 769)

Gross interest expenses (464) (604) (2 272)

Net interest expenses (385) (474) (1 828)

• Financialexpensesdecreasedmainlyduelowerproportionofinterest-bearingdebtinIndianRupeepartlyoffsetbyinterestexpensesrelatedtothedeferredlicencefeepaymentsinIndia.

• ThenetcurrencygainswereprimarilyrelatedtofinancialassetsandliabilitiesinothercurrenciesthantheNorwegiankrone.• NetchangeinfairvalueoffinancialinstrumentsalsoincludesincreasedvalueofthetotalreturnswapwithVimpelComLtd.ADRsasunderlyingasset.The

maindriverofthefairvalueofthisinstrumentistheVimpelComshareprice.

Taxes• Theestimatedeffectivetaxrateforthefirstquarterof2013was24.5%,andtheeffectivetaxratefortheyearof2013isestimatedtobearound25%.

Investments

First quarter Year


Capex 2 868 2 682 21 511

Capex excl. licences and spectrum 2 868 2 487 12 299

Capex excl. licences and spectrum/Revenues (%) 11.6 9.9 12.1

• Capitalexpenditure(excl.licences)increasedbyNOK0.4billionashighernetworkandinfrastructureinvestmentsinmostoperationsoffsetreducedinvestmentsinIndiaandGrameenphone.

Financial position• Duringthefirstquarter,totalassetsincreasedbyNOK3.7billiontoNOK172billionprimarilyduetoweakeningoftheNorwegianKroneagainstallmajor

currencies.• NetinterestbearingliabilitiesdecreasedbyNOK3.8billiontoNOK34.6billionmainlyduetorepaymentsofdebtbyTelenorASAandTelenorIndian

operation.• TotalequityincreasedbyNOK5.5billiontoNOK81.9billionduetoincomefromoperationsofNOK4.2billion,currencytranslationeffectsofnetNOK2.4

billionduetoweakerNorwegiancurrencypartlyoffsetbydividendstonon-controllinginterestsofNOK0.4billionandsharebuybackofNOK0.5billion.

Cash flow• Netcashinflowfromoperatingactivitiesduringthefirstquarterof2013wasNOK8.1billion,anincreaseofNOK1.8billioncomparedtothefirstquarterof

2012.EBITDAwasNOK0.5billionhigherduringthefirstquarterof2013.Inaddition,dividendsfromassociatedcompany,VimpelComLtd.ofNOK2.6billionwerereceivedduringthefirstquarterof2013.TheseeffectswerepartiallyoffsetbyanincreaseinworkingcapitalduetopaymentofregulatoryfeesinMalaysiaanddownscalingofouroperationinIndia.Inthefirstquarterof2012wehadapositiveeffectrelatedtolowerreceivablesinNorway.

• Netcashoutflowtoinvestingactivitiesduringthefirstquarterof2013wasNOK2.7billion,adecreaseofNOK5.4billioncomparedtothefirstquarterof2012.ThedecreaseismainlyexplainedbypurchaseofVimpelComLtd.sharesforNOK2.2billionandshortterminterest-bearingplacementsofNOK3.1billionduringthefirstquarterof2012comparedtothefirstquarterof2013.

• Netcashoutflowtofinancingactivitiesduringthefirstquarterof2013wasNOK4.6billion.Duringthefirstquarterof2013therewasanetrepaymentofinterest-bearingliabilitiesofNOK3.9billion,sharebuybackfromTelenorASAofNOK0.5billionanddividendspaidtonon-controllinginterestsofNOK0.2billion.

• CashandcashequivalentsincreasedbyNOK1.0billionduringthefirstquarterof2013toNOK9.8billionasof31March2013.

Transactions with related partiesFordetailedinformationonrelatedpartytransactionsrefertoNote34inTelenor’sAnnualReport2012.


/paGe 10/

Outlook for 2013

Based on the current group structure including India and with currency rates as of 31 March 2013 Telenor expects:• Organicrevenuegrowthintherangeof2-4%.• EBITDAmarginbeforeotherincomeandexpensesaround34%.• Capitalexpenditureasaproportionofrevenues,excludinglicencesandspectrum,intherangeof12-14%.

Risk and uncertaintiesTheexistingrisksanduncertaintiesdescribedbelowareexpectedtoremainforthenextthreemonths.

AgrowingshareofTelenor’srevenuesandprofitsisderivedfromoperationsoutsideNorway.CurrencyfluctuationsmayinfluencethereportedfiguresinNorwegianKronertoanincreasingextent.Politicalrisk,includingregulatoryconditions,mayalsoinfluencetheresults.

Foradditionalexplanationsregardingrisksanduncertainties,pleaserefertotheReportoftheBoardofDirectorsfor2012,sectionRiskFactorsandRiskManagement,andTelenor’sAnnualReport2012Note30ManagingCapitalandFinancialRiskManagementandNote35CommitmentsandContingencies.Readersarealsoreferredtothedisclaimerattheendofthissection.

New aspects of risks and uncertainties since the publication of Telenor’s annual report for 2012 are:

Financial aspectsAsof31March2013,TelenorASAhadissuedbankguaranteestotallingNOK2.6billion,ofwhichNOK1.4billionrelatestointerest-bearingdebt.TheremainingNOK1.2billionrelatestoguaranteesissuedtotheIndianDepartmentofTelecom.

DisclaimerThisreportcontainsstatementsregardingthefutureinconnectionwithTelenor’sgrowthinitiatives,profitfigures,outlook,strategiesandobjectives.Inparticular,thesection‘Outlookfor2013’containsforward-lookingstatementsregardingtheGroup’sexpectations.Allstatementsregardingthefuturearesubjecttoinherentrisksanduncertainties,andmanyfactorscanleadtoactualprofitsanddevelopmentsdeviatingsubstantiallyfromwhathasbeenexpressedorimpliedinsuchstatements.

Fornebu,25April2013The Board of Directors of Telenor asa


/paGe 11/

Consolidated income statementTelenor Group

First quarter Year

(NOK in millions except earnings per share) 20132012

Restated2012

Restated

Revenues 24 716 25 119 101 718

Costs of materials and traffic charges (6 751) (7 148) (29 187)

Salaries and personnel costs (2 747) (2 761) (10 683)

Other operating expenses (6 795) (7 450) (29 000)

Other income and (expenses) (270) (121) (868)

EBITDA 8 153 7 640 31 980

Depreciation and amortisation (3 438) (3 736) (14 402)

Impairment losses (2) (3 862) (7 823)

Operating profit 4 713 42 9 755

Share of net income from associated companies 1 061 595 2 785

Gain on disposal of associated companies 4 - -


Profit before taxes 5 572 947 10 770

Income taxes (1 363) (1 335) (1 743)

Net income (loss) 4 209 (388) 9 028

Net income (loss) attributable to:

Non-controlling interests 607 (973) 219

Equity holders of Telenor ASA 3 602 584 8 809

Earnings per share in NOK

Basic 2.34 0.37 5.63

Diluted 2.33 0.37 5.62

Theinterimfinancialinformationhasnotbeensubjecttoauditorreview.

Condensed interim financial information


/paGe 12/

Consolidated statement of comprehensive income Telenor Group

First quarter Year


Restated2012

Restated

Net income (loss) 4 209 (388) 9 028

Translation differences on net investment in foreign operations 3 157 (1 870) (4 531)

Income taxes (44) 392 114

Amount reclassified from equity to profit and loss on disposal - - 14

Net gain (loss) on hedge of net investment (949) 544 1 335

Income taxes 266 (152) (374)

Net gain (loss) on available-for-sale-investment - (4) 13

Amount reclassified from equity to profit and loss on disposal - - 5

Share of other comprehensive income (loss) of associated companies (51) (1 568) (1 540)

Items that may be reclassified subsequently to income statement 2 378 (2 658) (4 964)

Remeasurement of defined benefit pension plans (23) - 1 805

Income taxes 5 - (504)

Items that will not be reclassified to income statement (18) - 1 301

Other comprehensive income (loss), net of taxes 2 360 (2 658) (3 663)

TOTAL COMPREHENSIVE INCOME (LOSS) 6 568 (3 046) 5 365

Total comprehensive income (loss) attributable to:

Non-controlling interests 861 (1 076) 273

Equity holders of Telenor ASA 5 707 (1 970) 5 092



/paGe 13/

Consolidated statement of financial position Telenor Group

31 March31 March Restated

31 December Restated


Deferred tax assets 4 143 1 606 4 090

Goodwill 18 124 21 879 17 682

Intangible assets 29 985 20 960 28 818

Property, plant and equipment 44 349 44 240 43 596

Associated companies 39 488 34 587 39 433

Other non-current assets 4 188 3 100 4 309

Total non-current assets 140 276 126 372 137 928

Prepaid taxes 267 110 162

Inventories 1 317 1 212 1 198

Trade and other receivables 18 042 16 818 18 209

Other financial current assets 1 875 5 744 1 567

Assets classified as held for sale - 4 -

Cash and cash equivalents 9 838 12 687 8 805

Total current assets 31 338 36 575 29 941

Total assets 171 615 162 947 167 868

Equity attributable to equity holders of Telenor ASA 78 345 81 603 73 355

Non-controlling interests 3 554 1 168 3 057

Total equity 81 898 82 771 76 412

Non-current interest-bearing liabilities 38 805 26 078 39 826

Non-current non-interest-bearing liabilities 1 267 1 037 1 275

Deferred tax liabilities 1 505 1 999 1 640

Pension obligations 1 479 3 187 1 497

Other provisions 3 228 2 977 3 286

Total non-current liabilities 46 285 35 278 47 523

Current interest-bearing liabilities 8 780 11 898 10 275

Trade and other payables 28 993 27 825 28 034

Current tax payables 3 627 3 273 3 696

Current non-interest-bearing liabilities 967 1 055 651

Provisions and obligations 1 064 847 1 277

Total current liabilities 43 431 44 898 43 933

Total equity and liabilities 171 615 162 947 167 868

Equity ratio including non-controlling interests (%) 47.7 50.8 45.5

Net interest-bearing liabilities 28 853 18 384 33 082



/PAGE14/

Consolidated statement of cash flows Telenor Group

First quarter Year


Restated2012

Restated

Profit before taxes from total operations 5 572 947 10 770

Income taxes paid (1 631) (1 868) (6 041)

Net (gains) losses from disposals, impairments and change in fair value of financial assets and liabilities 42 (758) (523)

Depreciation, amortisation and impairment losses 3 440 7 598 22 225

Loss (profit) from associated companies (1 066) (595) (2 785)

Dividends received from associated companies 2 594 - 354

Currency (gains) losses not related to operating activities 36 (43) 110

Changes in other operating working capital assets and liabilities (889) 1 018 (108)

Net cash flow from operating activities 8 098 6 299 24 002

Purchases of property, plant and equipment (PPE) and intangible assets (2 707) (3 043) (16 982)

Purchases of subsidiaries and associated companies, net of cash acquired (60) (2 162) (7 533)

Proceeds of PPE, intangible assets and businesses, net of cash disposed 34 284 575

Proceeds and purchases of other investments 82 (3 132) 932

Net cash flow from investing activities (2 651) (8 053) (22 918)

Proceeds from and repayments of borrowings (3 883) 4 658 13 239

Proceeds from issuance of shares, incl. from non-controlling interests in subsidiaries 6 - -

Share buyback by Telenor ASA (538) - (4 022)

Repayment of equity and dividends paid to non-controlling interests in subsidiaries (185) (2 848) (6 015)

Dividends paid to equity holders of Telenor ASA - - (7 925)

Net cash flow from financing activities (4 600) 1 810 (4 723)

Effects of exchange rate changes on cash and cash equivalents 185 (269) (456)

Net change in cash and cash equivalents 1 033 (212) (4 095)

Cash and cash equivalents at the beginning of the period 8 805 12 899 12 899

Cash and cash equivalents at the end of the period 1) 9 838 12 687 8 805

1) Thefirstquarterof2013includesrestrictedcashofNOK41million,whilethefirstquarterof2012includedrestrictedcashofNOK124million.



/PAGE15/

Consolidated statement of changes in equity Telenor Group

Attributable to equity holders of the parent

(NOK in millions) Total paid

in capital Other

reserves Retained earnings

Cumulative translation differences Total

Non-controlling

interests Total

equity

Equity as of 31 December 2011 - as previously reported 9 574 4 707 75 995 (6 284) 83 992 2 910 86 902

Implementation effect of revised IAS 19 (Note 1) - - (923) - (923) - (923)

Equity as of 1 January 2012 - restated 9 574 4 707 75 072 (6 284) 83 069 2 910 85 979

Net income for the period - - 8 809 - 8 809 219 9 028

Other comprehensive income for the period - (222) - (3 495) (3 717) 54 (3 663)

Total comprehensive income for the period - (222) 8 809 (3 495) 5 092 273 5 365

Transactions with non-controlling interests - (3 267) - - (3 267) 3 553 286

Equity adjustments in associated companies - 319 - - 319 - 319

Dividends - - (7 925) - (7 925) (3 678) (11 603)

Share buyback (249) (3 773) - - (4 022) - (4 022)

Sale of shares, share issue, and share options to employees 9 80 - - 89 - 89

Equity as of 31 December 2012 9 334 (2 155) 75 956 (9 779) 73 355 3 057 76 412

Net income for the period - - 3 602 - 3 602 607 4 209

Other comprehensive income for the period - (69) - 2 175 2 106 254 2 360

Total comprehensive income for the period - (69) 3 602 2 175 5 707 861 6 568

Transactions with non-controlling interests - (69) - - (69) 76 7

Equity adjustments in associated companies - (25) - - (25) - (25)

Dividends - - - - - (440) (440)

Share buyback (27) (510) - - (538) - (538)

Sale of shares, share issue, and share options to employees - (87) - - (87) - (87)

Equity as of 31 March 2013 9 307 (2 916) 79 557 (7 603) 78 345 3 553 81 898

Attributable to equity holders of the parent

(NOK in millions) Total paid

in capital Other

reserves Retained earnings

Cumulative translation differences Total

Non-controlling

interests Total

equity

Equity as of 31 December 2011 - as previously reported 9 574 4 707 75 995 (6 284) 83 992 2 910 86 902

Implementation effect of revised IAS 19 (Note 1) - - (923) - (923) - (923)

Equity as of 1 January 2012 - restated 9 574 4 707 75 072 (6 284) 83 069 2 910 85 979

Net income for the period - - 584 - 584 (972) (388)

Other comprehensive income for the period - (1 572) - (982) (2 553) (105) (2 658)

Total comprehensive income for the period - (1 572) 584 (982) (1 969) (1 076) (3 046)

Transactions with non-controlling interests - 156 - - 156 32 188

Equity adjustments in associated companies - 326 - - 326 - 326

Dividends - - - - - (698) (698)

Sale of shares, share issue, and share options to employees 5 16 - - 21 - 21

Equity as of 31 March 2012 9 579 3 634 75 656 (7 266) 81 603 1 167 82 771



/paGe 16//paGe 16/

Note 1 – General accounting principlesTelenor (the Group) consists of Telenor asa (the Company) and its subsidiaries.TelenorASAisalimitedliabilitycompany,incorporatedinNorway.Thecondensedconsolidatedinterimfinancialstatementsconsistof the Group and the Group’s interests in associated companies and joint ventures.Asaresultofroundingdifferences,numbersorpercentagesmaynotadduptothetotal.

These interim condensed consolidated financial statements for the three monthsending31March2013,havebeenpreparedinaccordancewithIAS34InterimFinancialReporting.Theinterimcondensedconsolidatedfinancialstatements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with theGroup’sAnnualReport2012.Theaccountingpoliciesadoptedinthepreparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual financial Statementsfortheyearended31December2012.

for information about the standards and interpretations effective from 1 January2013,pleaserefertoNote1intheGroup’sAnnualreport2012.The group has early adopted the following new and revised standards and interpretations,witheffectfrom1January2013.

• IFRS10ConsolidatedFinancialStatements• IFRS11JointArrangements• IFRS12DisclosureofInterestsinOtherEntities• IAS27(asrevisedin2011)SeparateFinancialStatements• IAS28(asrevisedin2011)InvestmentinAssociatesandJointVentures

The following standards and interpretations adopted with effect from 1 January 2013 have implementation impact on the Group’s consolidated interim financial statements:

• IAS1PresentationofFinancialstatements–amended.Theamendmentto Ias 1 changes the grouping of items presented in Other Comprehensive Income.Itemsthatmaybereclassified(or‘recycled’)toprofitorloss(when specific conditions are met) are presented separately from items thatwillneverbereclassified.Theamendmentaffectspresentationofthe Consolidated statement of Comprehensive Income only and has no impactontheGroup’sfinancialpositionorperformance.

• IAS19(asrevisedin2011)EmployeeBenefits:TheIASBhasissuednumerousamendmentstoIAS19.Theserangefromfundamentalchanges such as: to eliminate the corridor approach and recognise all actuarial gains and losses in Other Comprehensive Income as they occur; to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability(asset).Thechangesshallbeappliedretrospectivelyandasaconsequence,Telenorrecognisedtheimpactofthesechangesasofthedate of initial application (1 January 2012) against the opening balance in equity.

Telenor is of the opinion that the presentation of net interest cost element as financial items gives better information of the Group’s financial performance and has decided to present net interest amount as financial itemsintheconsolidatedincomestatement.Thischangeisappliedretrospectively and the consolidated income statements for 2012 are restated.

TheimplementationeffectsofthechangesinIAS19includingthereclassification of the net interest amount are:

(NOK in millions)

As of 1 January

2012

As of 31 March

2012

As of 31 December

2012

Consolidated Statement of Financial Position

Deferred tax assets 318 317 (194)

Associated companies (99) (99) (99)

Pension obligations 1 142 1 139 (671)

Equity (923) (921) 378

(NOK in millions) First quarter

2012 Year 2012

Consolidated Income Statement

Pension costs 21 93

Financial expenses (20) (86)

Income taxes - (7)

Net income(loss) 1 -

Consolidated Statement of Comprehensive Income

Net income 1 -

Other comprehensive income (loss), net of taxes *) 1 1 301

Total Comprehensive income (loss) 2 1 301

*) effect recognised in Other comprehensive income for the year of 2012 due to the change of discount rate used to determine pension obligations as of 31 December 2012.PleaserefertoNote27intheGroup’sAnnualreport2012formoreinformationabouttheassumptionsused.

• IAS28(asrevisedin2011)InvestmentinAssociatesandJointVentures:The changes in Ias 28 scope in joint ventures to be accounted for under equity method and requires that if an investment in an associate becomesaninvestmentinajointventureorviceversa,theentityshallnotremeasuretheretainedinterest.Thechangesshallbeappliedretrospectivelyandasaconsequence,theGroup’sshareoffairvaluegainarisingfromincreaseinVimpelCom’sstakeinEurosetfrom49.9%to50.0%recognisedin2012(seenote20intheGroup’sAnnualReport2012),hasbeen reversed and the consolidated financial statements for 2012 are restated with the following impacts:


Consolidated Statement of Financial Position

Associated companies (1 203)

Consolidated Income Statement

Share of net income from associated companies (1 258)

Other comprehensive income (loss) 55

Notes to the consolidated interim financial statements


/PAGE17/

Note 2 – Events after the balance sheet dateOn18April2013,VimpelComdeclaredfinaldividendfortheyear2012ofUSD0.35pershareandtheextraordinarydividendofUSD0.79pershareinrelationtoAltimo’sconversionofitspreferredsharesintocommonshares,correspondingtototaldividendofapproximatelyUSD2.0billion.TelenorisexpectedtoreceiveadividendpaymentofUSD662millioninMay2013.

On23April2013,theBoardofDirectorsofDiGideclaredthefirstinterimdividendfor2013ofMYR0.038persharewhichcorrespondtoapproximatelyNOK0.6billiontotaldividendandapproximatelyNOK0.3billionfortheTelenorownershipshare.

On24April2013,theBoardofDirectorsofTotalAccessCommunicationpublic Company limited (dtac) declared interim dividend for 2013 of THB 1.12persharewhichcorrespondtoapproximatelyNOK0.5billiontotaldividendandapproximatelyNOK0.3billionforTelenorownershipshare.


/paGe 18/

The operationsFirst quarter

Total revenues of which internal EBITDA before other income and expenses *) EBITDA Operating profit (loss)


Restated Growth 2013 2012 2013 Margin2012

Restated Margin 2013 Margin2012


Restated Margin

Norway 6 164 6 222 (0.9%) 89 98 2 719 44.1% 2 455 39.5% 2 672 43.3% 2 413 38.8% 1 919 31.1% 1 735 27.9%

Sweden 2 539 2 545 (0.3%) 31 26 705 27.8% 629 24.7% 704 27.7% 628 24.7% 381 15.0% 343 13.5%

Denmark 1 192 1 501 (20.6%) 17 32 254 21.3% 296 19.7% 185 15.5% 264 17.6% 8 0.7% 57 3.8%

Hungary 930 964 (3.6%) 4 6 355 38.2% 351 36.4% 344 37.0% 339 35.2% 255 27.4% 238 24.7%

Serbia 669 656 2.1% 30 31 268 40.0% 257 39.1% 268 40.0% 257 39.1% 193 28.9% 169 25.8%

Montenegro 106 120 (11.7%) 12 8 38 36.2% 43 35.8% 38 35.9% 40 33.4% 30 28.2% 29 24.1%

dtac - Thailand 4 519 4 209 7.4% 14 10 1 423 31.5% 1 261 30.0% 1 317 29.2% 1 261 30.0% 855 18.9% 855 20.3%

DiGi - Malaysia 3 005 2 968 1.3% 1 1 1 302 43.3% 1 391 46.9% 1 303 43.4% 1 392 46.9% 774 25.8% 765 25.8%

Grameenphone - Bangladesh 1 672 1 627 2.8% 4 1 795 47.5% 898 55.2% 795 47.5% 899 55.2% 532 31.8% 612 37.6%

Pakistan 1 286 1 387 (7.3%) - 5 496 38.6% 568 41.0% 497 38.7% 563 40.6% 1 0.1% (25) nm

India 708 1 009 (29.8%) - 1 (185) nm (622) nm (192) nm (621) nm (194) nm (4 684) nm

Broadcast 1 610 1 629 (1.1%) 41 40 472 29.3% 501 30.8% 474 29.4% 481 29.5% 324 20.1% 335 20.6%

Other units 1 142 1 154 (1.1%) 584 612 (217) nm (234) nm (250) nm (242) nm (368) nm (359) nm

Eliminations (827) (871) - (827) (871) (3) - (34) - (3) - (34) - 2 - (27) -

Group 24 716 25 119 (1.6%) - - 8 423 34.1% 7 761 30.9% 8 153 33.0% 7 640 30.4% 4 713 19.1% 42 0.2%

*) ThesegmentprofitisEBITDAbeforeotherincomeandexpenses.

Reconciliation

First quarter Year


Restated2012

Restated

Net income (loss) 4 209 (388) 9 028

Income taxes (1 363) (1 335) (1 743)

Profit before taxes 5 572 947 10 770


Profit (loss) from associated companies 1 066 595 2 785

Depreciation and amortisation (3 438) (3 736) (14 402)

Impairment losses (2) (3 862) (7 823)

EBITDA 8 153 7 640 31 980

Gains (losses) on disposal of fixed assets and operations (88) (31) (161)

Workforce reductions and loss contracts (180) (90) (692)

One-time effects to pension costs (1) - (16)


Note 3 – Segment table and reconciliation of ebitda before other income and expensesTheoperatingsegmentsremainunchangedinthefirstquarterof2013.Nevertheless there have been some structural changes in the composition ofthedifferentsegments.ABCStartsidenpreviouslyreportedasapartofBroadcastisreportedunderOtherunitsfrom1January2013.Thefiguresforpreviousperiodsarereclassifiedaccordingly.


/PAGE19/

The operationsFirst quarter

Total revenues of which internal EBITDA before other income and expenses *) EBITDA Operating profit (loss)


Restated Growth 2013 2012 2013 Margin2012



Restated Margin

Norway 6 164 6 222 (0.9%) 89 98 2 719 44.1% 2 455 39.5% 2 672 43.3% 2 413 38.8% 1 919 31.1% 1 735 27.9%

Sweden 2 539 2 545 (0.3%) 31 26 705 27.8% 629 24.7% 704 27.7% 628 24.7% 381 15.0% 343 13.5%

Denmark 1 192 1 501 (20.6%) 17 32 254 21.3% 296 19.7% 185 15.5% 264 17.6% 8 0.7% 57 3.8%

Hungary 930 964 (3.6%) 4 6 355 38.2% 351 36.4% 344 37.0% 339 35.2% 255 27.4% 238 24.7%

Serbia 669 656 2.1% 30 31 268 40.0% 257 39.1% 268 40.0% 257 39.1% 193 28.9% 169 25.8%

Montenegro 106 120 (11.7%) 12 8 38 36.2% 43 35.8% 38 35.9% 40 33.4% 30 28.2% 29 24.1%

dtac - Thailand 4 519 4 209 7.4% 14 10 1 423 31.5% 1 261 30.0% 1 317 29.2% 1 261 30.0% 855 18.9% 855 20.3%

DiGi - Malaysia 3 005 2 968 1.3% 1 1 1 302 43.3% 1 391 46.9% 1 303 43.4% 1 392 46.9% 774 25.8% 765 25.8%

Grameenphone - Bangladesh 1 672 1 627 2.8% 4 1 795 47.5% 898 55.2% 795 47.5% 899 55.2% 532 31.8% 612 37.6%

Pakistan 1 286 1 387 (7.3%) - 5 496 38.6% 568 41.0% 497 38.7% 563 40.6% 1 0.1% (25) nm

India 708 1 009 (29.8%) - 1 (185) nm (622) nm (192) nm (621) nm (194) nm (4 684) nm

Broadcast 1 610 1 629 (1.1%) 41 40 472 29.3% 501 30.8% 474 29.4% 481 29.5% 324 20.1% 335 20.6%

Other units 1 142 1 154 (1.1%) 584 612 (217) nm (234) nm (250) nm (242) nm (368) nm (359) nm

Eliminations (827) (871) - (827) (871) (3) - (34) - (3) - (34) - 2 - (27) -

Group 24 716 25 119 (1.6%) - - 8 423 34.1% 7 761 30.9% 8 153 33.0% 7 640 30.4% 4 713 19.1% 42 0.2%

*) ThesegmentprofitisEBITDAbeforeotherincomeandexpenses.


/paGe 20/

Definitions• Organicrevenueisdefinedasrevenueadjustedfortheeffectsof

acquisitionanddisposalofoperationsandcurrencyeffects.• Capitalexpenditure(capex)isinvestmentsintangibleandintangible

assets.• OperatingcashflowisdefinedasEBITDAbeforeotherincomeand

expenseslesscapex,excludinglicencesandspectrum.• Investmentsinbusinessescompriseacquisitionsofsharesand

participations,includingacquisitionsofsubsidiariesandbusinessesnotorganisedasseparatecompanies.

Mobile operations

RevenuesSubscription and traffic• consistofsubscriptionandconnectionfees,revenuesfromvoice

(outgoingtraffic)andnon-voicetraffic,outboundroamingandothermobileservicerevenues.Subscriptionandtrafficincludesonlyrevenuesfromthecompany’sownsubscriptions.

Interconnect• consistofrevenuesfromincomingtrafficrelatedtothecompany’sown

subscriptions.RevenuesfromincomingtrafficrelatedtoserviceproviderorMVNOsubscriptionsarenotincluded.

Other mobile• consistofinboundroaming,nationalroaming,telemetricandrevenues

related to service providers and MVNOs (Mobile Virtual Network Operators).Telemetricisdefinedasmachine-to-machineSIMcards(M2M),forexamplevendingmachinesandmeterreadings.

Non-mobile• consistofrevenuesfromcustomerequipmentandbusinessesthatarenot

directlyrelatedtomobileoperations.

Mobile revenues from company’s own subscriptions• consistof‘Subscriptionandtraffic’and‘Interconnect’anddonotinclude

revenuesfrominboundroaming,nationalroaming,serviceproviders,MVNOs,saleofcustomerequipmentandincomingtrafficrelatedtoserviceprovidersubscriptions.

Key FiguresSubscriptionsContract subscriptions are counted until the subscription is terminated or until there has been no revenues or outgoing/incoming traffic during the lastthreemonths.Prepaidsubscriptionsarecountedasactiveiftherehasbeen outgoing or incoming traffic or if the sIM card has been reloaded during thelastthreemonths.ServiceproviderandMVNOsubscriptionsarenotincluded.DataonlySIMcardsareincluded,butSIMcardsusedfortelemetricapplicationsandtwin/multiSIMcardsareexcluded.TotalsubscriptionsarevoiceSIMcardsplusdataonlySIMcardsusedformobilebroadband.

Mobile broadband subscriptionsMobile broadband subscriptions include both data only sIM cards and voice subscriptions having a mobile broadband package as a supplementary service.Hence,thesumofvoicesubscriptionsandmobilebroadbandsubscriptionswillexceedthetotalnumberofsubscriptions.

Average traffic minutes per subscription per month (AMPU)Traffic minutes per subscription per month are calculated based on total outgoing and incoming rated minutes from the company’s own subscriptions lessdataonlysubscriptions.Thisincludeszeroratedminutesandoutgoingminutesfromownsubscriptionswhileroaming.Outgoingandincomingminutesrelatedtoinboundroaming,nationalroaming,serviceprovidersandMVNOsarenotincluded.

Average revenue per subscription per month (ARPU)arpu is calculated based on mobile revenues from the company’s own subscriptions,dividedbytheaveragenumberofsubscriptionsfortherelevantperiod.

Fixed operationsRevenuesTelephony• consistofsubscriptionandconnectionfees,traffic(fixedtofixed,fixedto

mobile,toothercountries,valueaddedservices,othertraffic)forPSTN/ISDNandVoiceoverInternetProtocol(VoIP).

Internet and TV• consistofsubscriptionandconnectionfeesforxDSLandfibre,

subscription fees and traffic charges for Dial up Internet in addition to revenuesfromTVservices.

Data services• consistofNordicConnect/IP-VPN,Globalcommunicationandsecurity.

Other• consistofleasedlines,managedservicesandotherretailproducts.

Wholesale• consistofsaletoserviceprovidersoftelephony(PSTN/ISDN),Bitstream,

LLUB,nationalandinternationalinterconnect,transittraffic,leasedlinesandotherwholesaleproducts.

Key FiguresSubscriptionsTelephonyconsistofPSTN,ISDNandVoIPsubscriptions.

InternetconsistsofbroadbandaccessoverxDSL,fibreandcableTV.

TVconsistsofTVservicesoverfibreandcable.

Subscriptionsarecounteduntilthesubscriptionisterminated.

Average revenue per subscription per month (ARPU)arpu is calculated based on revenues from the company’s own subscriptions,dividedbytheaveragenumberofsubscriptionsfortherelevantperiod.

Internet arpu is calculated based on Internet revenues as defined above exceptTVservicerevenues.

TVARPUiscalculatedbasedonrevenuesfromTVservices.

Broadcast

RevenuesCanal Digital DTH• consistofrevenuesfromNordicDTHsubscribers,householdsinSMATV

networksandDTTsubscribersinFinland.

Satellite Broadcasting• consistofrevenuesfromsatelliteservicesfromthesatelliteposition

1-degreewest.

Norkring• consistofrevenuesfromterrestrialradioandTVtransmissioninNorway

andBelgium.

Conax• consistofrevenuesfromsaleofencryptionandconditionalaccess

servicesforTVdistribution.

Other• consistofrevenuesfromTelenorMediaInvest.


/paGe 21/

First quarter 2013published by Telenor asaN-1331Fornebu,NorwayPhone:+4767890000

Investor Relations:Phone:+4767892470e-mail:[email protected]

www.telenor.com

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Documents

Q1/ 2013 - Telenor · preparing for the launch of 3G services on the 2.1 GHz frequency band in the ... quarter of 2013 compared to the first quarter of 2012, unless otherwise